The Minister of Power, Sale Mamman, has announced that the proposed electricity tariff increase by the Federal Government will kick off in July.
The Nigerian Electricity Regulatory Commission (NERC) had, in January, announced that there would be an upward review of electricity tariff across the country from April 1.
Electricity Distribution Companies (DisCos) were, however, directed to suspend the proposed tariff increase in March due to the effect of the COVID-19 pandemic.
Mamman, while speaking on Tuesday at the investigative public hearing on power sector recovery plan and the impact on COVID-19 pandemic, stated that the subsidy incurred in order to maintain the current tariff level is unsustainable.
The impact of the COVID-19 pandemic has also affected our laid-out plan for the repositioning of the electricity market towards financial sustainability under the power sector recovery programme (PSRP).
Initially, the regulator, following the completion of public consultation on tariff review, planned on conducting a tariff review in April 2020.
However, due to COVID-19 and customer apathy, the proposed tariff review was delayed by three months.
The impact of this means the subsidy being incurred in maintaining the current tariff level had to be maintained until July 2020 when the proposed tariff review will be implemented.
The current situation in the Nigerian power sector is that a lot of capital investment is being made, most of which is dependent on donor funding, loans and budgetary allocation.
For projects that we have already secured their funding, we do not expect any adverse effect.
Stakeholders in the electricity sector have long clamoured for the need for cost-reflective tariffs to ensure a self-sustaining sector that is not dependent on subsidies and bailouts.
According to Usman Mohammed, former managing director of the Transmission Company of Nigeria (TCN), Nigeria has the cheapest electricity tariffs in West Africa.